Tokyo Stock Exchange, Inc. (hereinafter, "TSE") has taken disciplinary action (imposition of a JPY 80 million fine) against SMBC Nikko Securities Inc. (hereinafter, the "Company") pursuant to the provisions of Rule 34, Paragraph 1, Item 8 of the Trading Participant Regulations.
Additionally, TSE has requested the submission of a business improvement report pursuant to the provisions of Rule 19 of the Trading Participant Regulations. The business improvement report shall include:
- Constructing an effective internal management system by re-examining the management system related to corporate information such as the supervision of sales personnel, and making other necessary improvements;
- Fully reinforcing officers' and employees' awareness of compliance with laws and regulations by conducting extensive and intensive training so as to have them obtain sufficient knowledge regarding laws, rules, and regulations, etc. including the handling of corporate information; and
- Clarifying the locus of responsibility of officers and employees with regard to this issue
Outline of Violation
Business operation which lacks the necessary and appropriate measures to prevent unfair trading with respect to the management of corporate information, as well as inappropriate solicitation which includes acts in violation of laws and regulations
- Solicitation through provision of corporate information is deemed to fall under Article 117, Paragraph 1, Item 14 of the Cabinet Office Ordinance on Financial Instruments Business, etc. (hereinafter, the "Financial Instruments Business Ordinance") pursuant to Article 38, Item 7 of the Financial Instruments and Exchange Act (hereinafter, the "Act").
- Additionally, the Company's management system for corporate information is deemed to lack the necessary and appropriate measures to prevent unfair trading and fall under Article 123, Paragraph 1, Item 5 of the Financial Instruments Business Ordinance pursuant to Article 40, Item 2 of the Act.
- The above acts are also deemed, on the whole, to neglect investor protection and damage the fairness of transactions, as well as fall under a "violation of just and equitable principles of trade" specified in Rule 34, Paragraph 1, Item 8 and Rule 42 of the Trading Participant Regulations.
